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Old 10-27-2011, 09:24 AM   #41
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ok, to all the people who said "yes, income taxes must be paid out of the ER's SWR", what if your taxes due are larger than your SWR? are you going to stiff the IRS and not eat for a year? i dont think so, i think the correct answer is situation dependant. if you are making a large enough taxable return on your money i think it is total appropriate to make the taxes on that large return an investment expense that is not taken out of your SWR. be careful of hard and fast rules.
After re-reading this and in an effort not to offend anyone, here is my response to the OP. By the way, arguments are in room 12A, next door. This is abuse.

In most cases of living off your SWR, you will be paying all of your taxes out of the income thrown off from your cash flow. In the case of a lottery win or a huge year of dividends or other unexpected income, you would pay the taxes owed due to the windfall out of the windfall, and then pay your normal taxes out of your normal cashflow (SWR). How's that?
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Old 10-27-2011, 09:45 AM   #42
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In most cases of living off your SWR, you will be paying all of your taxes out of the income thrown off from your cash flow. In the case of a lottery win or a huge year of dividends or other unexpected income, you would pay the taxes owed due to the windfall out of the windfall, and then pay your normal taxes out of your normal cashflow (SWR). How's that?
No good - too logical, try again, not enough to argue about.
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Old 10-27-2011, 09:48 AM   #43
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No good - too logical, try again, not enough to argue about.
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Old 10-27-2011, 10:28 AM   #44
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After re-reading this and in an effort not to offend anyone, here is my response to the OP. By the way, arguments are in room 12A, next door. This is abuse.

In most cases of living off your SWR, you will be paying all of your taxes out of the income thrown off from your cash flow. In the case of a lottery win or a huge year of dividends or other unexpected income, you would pay the taxes owed due to the windfall out of the windfall, and then pay your normal taxes out of your normal cashflow (SWR). How's that?
Still so many questions remain--what if I want to pay my SWR taxes out of my lottery winnings? Why doesn't FIREcalc address that idea? And can you tell me where I can buy this winning lottery ticket?
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Old 10-31-2011, 08:23 AM   #45
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This thread has now run its course.

Thanks folks.

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